Abank advertises an apr of 5.5% on personal loans. how much more is the apy when the rate is compounded monthly as compared to when it's compounded quarterly? explain your answer.

0.027%

Step-by-step explanation:

We have been given that a bank advertises an APR of 5.5% on personal loans.

To solve our given problem we will Annual percentage yield formula.

, where,

r = Interest rate in decimal form,

n = Number of compounding periods per year.

Let us convert our given rate in decimal form.

Let us find APY, when the rate is compounded monthly by substituting n=12 and r=0.055 in APY formula.

Now let us find APY, when rate is compounded quarterly by substituting n=4 and r=0.055 in APY formula.

Let us subtract APY when rate in compounded quarterly from APY, when rate is compounded monthly to find the difference.

Therefore, APY when the rate is compounded monthly is 0.027% greater than to APY, when the rate is compounded quarterly.

bn,mn,n.vn.

step-by-step explanation: